Education Law

ABA urges suspension or forgiveness of some student debt in letter to new chief of federal student aid office

  • Print

student debt on sticky note

Image from Shutterstock.

The ABA is asking the Biden administration to take steps to relieve the burden of student loan debt, including by suspending or forgiving some of the debt. In a June 8 letter, ABA President Patricia Lee Refo said the association appreciates congressional efforts to resolve the problem.

“But we also urge the executive branch to assist student loan borrowers by forgiving or canceling some level of debt,” Refo wrote.

The letter is addressed to Richard Cordray, the new chief operating officer of the Office of Federal Student Aid in the U.S. Department of Education. The letter does not specify an amount to be forgiven.

One option, Refo said, has been proposed by Democratic U.S. Sen. Elizabeth Warren of Massachusetts. Warren suggests that the DOE could act by invoking Section 432(a) of the Higher Education Act of 1965, which gives the department the authority to modify, “compromise, waive or release any right, title, claim, lien or demand, however acquired, including any equity or any right of redemption.”

Student debt is particularly high for law school graduates and others who earn professional degrees. A 2019 report by the Congressional Research Service found that students pursuing professional degrees owed, on average, more than $175,000 upon graduation.

The finding is in accord with a 2020 report by the ABA Young Lawyers Division finding that more than half of surveyed lawyers had more than $150,000 in student debt at graduation, and more than one of every four had $200,000 or more in debt at graduation, according to Refo’s letter.

The YLD survey also found that student debt for many new lawyers actually increased during their early years of practice. Their average loan balance was $164,742 at graduation, but $171,036 at the time that they took the survey.

Because of the high level of debt, some new lawyers delay buying a home or a new car, postpone marriage or delay having children.

Refo’s letter suggests two other actions that Cordray could take to address the debt burden:

• Simplify the Public Service Loan Forgiveness Program and promote eligibility requirements more clearly. The PSLF Program, established in 2007, offers loan forgiveness to people with federal direct loans who make monthly loan payments for 10 years while working full time in public service.

Cordray’s office “should clarify the jobs and positions that qualify for PSLF,” Refo said in the letter. “For example, it would be helpful for FSA to clarify whether a private attorney who contracts full time with a county court to provide indigent defense services—and thus performs essentially the same role a public defender—qualifies for PSLF. We believe the answer would be yes.”

• Work with Congress to enact measures that allow student loan borrowers to refinance their federal student loans when interest rates drop and to convert any private loans into federal student loans.

Currently, federal student loan interest rates can exceed 5%, and private student loan rates can exceed 10%, according to Refo’s letter.

Give us feedback, share a story tip or update, or report an error.